Inventergy Global Inc. (INVT), the patent licensing company run by CEO Joe Beyers, said it has less than five months of cash left and will need to raise capital again after posting a net loss of $6.3 million in the first quarter of 2015.
Campbell, Calif.-based Inventergy’s net loss per share of 25 cents, compared with a net loss of $5.43 million, or 43 cents a year ago.
Revenue was $166,912 compared with no revenue a year ago. Patent amortization expenses increased to $387,585 from $292,815. General and administrative expenses decreased to $2.83 million from $3.04 million, reflecting cost cutting efforts.
At March 31, Inventergy had an accumulated deficit since inception of $49.7 million and had a negative working capital of $5.35 million. As of May 4, it had remaining cash of $2.3 million, which includes $1 million of minimum cash reserves intended to serve as additional collateral pursuant to the terms of a revenue share and note purchase agreement, as amended and restated with Fortress Investment Group.
“These factors raise substantial doubt about our ability to continue as a going concern,” the company said in a filing with the Securities and Exchange Commission.
While Inventergy entered into its first license agreement in February and received an additional drawdown from the Fortress agreement of $1,199,500 as a result of entering into the license agreement, its continuation as a going concern is dependent both on achieving additional licensing revenue from its patent portfolios and/or obtaining additional financing on acceptable terms.
The company said it will seek to continue its operations primarily with income received through licensing revenues, though it may need to seek additional financing capital through loans, subject to the restrictions of the Fortress agreement, and/or the sale of securities.
“If we are required to raise additional financing capital, we cannot assure you that we will be able to obtain additional such capital on terms acceptable to us or at all. Additionally, if we raise capital through the issuance of equity, our current stockholders will experience dilution.”
Shares of Inventory fell 0.96 cents to 37 cents in late morning trading. They've traded between 28 cents and $9.90 over the past year.
Inventergy said it believes its working capital expenses will be approximately $6.8 million for the next twelve months.
Those expenses will consist of about $2.5 million in employee related costs, which reflects a 30% decrease from its previous forecast, $1.3 million in patent maintenance and prosecution fees, $2 million in other operational costs and $1 million of payments relating to the acquisition of our patent portfolios.
The company also expects $1.6 million in debt servicing fees payable to Fortress during the year.
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